Biden Administration issues No Surprises Act final rule

The Biden Administration issued a final rule on Friday, August 19, providing updates to the No Surprises Act (NSA) independent dispute resolution (IDR) process that providers and insurers can use to settle out-of-network payment disputes. While claiming to eliminate the express rebuttable presumption originally published in its proposed rules that favor the qualified payment amount (QPA), the rules effectively impose an implied presumption favoring the QPA over other permissible factors.

The NSA, enacted on December 27, 2020, as part of the Consolidated Appropriations Act of 2021, is designed to protect patients from receiving surprise medical bills. Rules promulgated to implement the behemoth law include details regarding how providers and health plans resolve disagreements regarding the payment rate for out-of-network services. This IDR process has been the subject of significant controversy.

The IDR process was designed in statute as a "baseball-style arbitration" where the provider and insurance plan each submit a proposed payment and the arbitrator is required to select from the two proposed payment amounts. Under the interim final rules issued in September 2021, the arbitrator must begin with the presumption that the QPA is the most appropriate rate and select the proposed payment amount closest to the QPA unless certain conditions are met. Providers have been critical of using the QPA as the primary factor, arguing that it favors insurers over providers and several lawsuits were filed challenging these interim final rules.

Earlier this year, the US District Court for the Eastern District of Texas in Texas Medical Association and LifeNet vacated the portions of the interim final rule establishing the express rebuttable presumption in favor of the QPA. The final rule issued on Friday is narrow in scope and only addresses the decisions in those cases and the comments received regarding the information that must be shared about the QPA when a service is downcoded.

 Changes made by the final rule include the following:

1. Plans and issuers cannot require nonparticipating providers to use a plan- or issuer-owned portal to initiate open negotiation.
2. If a QPA is based on a downcoded service code or modifier – i.e. the plan or issuer changed a provider's service code used for billing to one of lesser value thereby reducing the payment to the provider – in addition to its initial payment or notice of denial, a plan or issuer must provide (i) a statement that the service code or modifier billed by the provider, facility or provider of air ambulance services was downcoded, (ii) an explanation of why the claim was downcoded, including a description of which service codes or modifiers were altered, added or removed, if any and (iii) the amount that would have been the QPA had the service code or modifier not been downcoded.
3. The certified IDR entity must consider the QPA and all additional information submitted by each party to select the offer that "best represents the value of the item or service under dispute." The QPA must always be considered and should aid the IDR entities in their consideration of the other statutory factors. As part of considering any other information submitted by a party, the IDR entity should evaluate whether the additional information may have already been captured by the QPA or any other information submitted by the parties. Should the information be captured by the QPA, the certified IDR entity should not give weight to that information.
4. The certified IDR entity must issue a written decision that includes "a comprehensive discussion of the rationale" for determining the out-of-network rate.

By preventing the IDR entities from giving weight to any information that is already accounted for in the QPA, the rule continues to imply a presumption in favor of the QPA as the correct measure of the payment amount.

Whether this new rule does enough to balance the factors, the arbitrators must consider or will give rise to additional litigation remains to be seen. We will continue to follow the litigation and assist providers with claims they believe have been adjudicated and underpaid.